Search form

Yanis Varoufakis: Without More Democracy Europe is Doomed

Former Greek Finance Minister Yanis Varoufakis returns to the spotlight to attend the official launch of the Democracy in Europe Movement 2025 (Diem25) on February 9, 2016 in Berlin, Germany.Sean Gallup/Getty Image

Former Greek Finance Minister Yanis Varoufakis has inhabited many guises. The “rock star economist”, “the bad boy of capitalism”, and even “Dr. Doom”—the latter referring to his rather gloomy worldview and tendency to predict economic Armageddon.

An economics professor by trade, he was an unusual choice for the role of Finance Minister in the left-wing Syriza government, with his open-necked shirts, leather jacket and radical, anti-austerity views. The media might have been mesmerized by his stint in government at the height of the Greek debt crisis from January to July 2015, but his fellow Eurozone ministers, with whom he repeatedly clashed, were less enamoured. He was forced to resign before a new bailout could be agreed for his beleaguered nation.

Now Varoufakis has a new role, as spokesman for a pro-democracy movement that launched on Tuesday in Berlin. Billed as a pan-European collective, DiEM25 (Democracy in Europe Movement 2025) aims to shift the balance of power away from the unelected Brussels bureaucrats and restore it to the people and their elected representatives.

Without this Varoufakis says, in typical fashion, the European project is doomed. Newsweek sat down with him to discuss his political future, the forthcoming U.K referendum on its EU membership, and his longstanding friendship with Margaret Thatcher’s former chancellor, Norman Lamont.

What is behind the launch of this new movement? Do you really see the European Union as a threat to democracy?

The EU as a decision-making body is a democracy-free zone. It’s a bit like being on the moon and speaking of an oxygen deficit when there is no oxygen, similarly in Brussels there is no democracy. There is democracy at the level of the nation state because there are parliaments, but the bodies that make the important decisions, such as the troika [the European Commission, the International Monetary Fund and the European Central Bank] and the Economic and Financial Affairs Council (Ecofin), are not answerable to anyone. The finance ministers all go home and denounce the decisions made by the Eurogroup but claim there is nothing they can do about it. Most of those decisions are made by shadowy bodies and bureaucrats that nobody knows about, let alone elects. That is why the European economy is the planet’s greatest financial black hole.

What I said was that closing the banks and spreading the fear that they would never open again, in order to force the acceptance of a new loan on the Greek people, was to terrorize them. Any attempt to push the political agenda through spreading fear is terrorism. We have a new form of technocratic feudalism in Europe, which is contemptuous of democracy… They consider the people to be a nuisance in Brussels.

Is the European public aware of the contempt in which the bureaucrats in Brussels apparently hold them?

There is no doubt. Look at the results on the Eurobarometer website—the official EU site which takes the pulse of public opinion. There has been a catastrophic fall in people’s trust of European institutions. Five years ago, 75-80 percent of EU citizens said they trusted the EU, now that has completely reversed.

You seem to have a very negative opinion of the EU, yet you wrote an article in The Guardian last week saying that the U.K. should remain within it. Is that not a contradictory view?

To quote the Eagles’ famous song “Hotel California”, you can check out but you can never leave. Even if Britain votes to leave the EU, it will check out of Brussels but it won’t be able to exit completely. Even the most ardent Euroskeptics in the Conservative Party advocate for Britain to stay within the single market. But, you can’t be in the single market without being in EU. There has to be common industrial, labor and environmental standards across Europe. The idea that Britain, the island, is going to sail away to find solace with the U.S. or China is very far fetched. The U.S. is waiting for such an opportunity to impose punitive free trade agreements on Britain, such as the Transatlantic Trade and Investment Partnership (TTIP), which will deny the House of Commons the sovereignty those voting for Brexit are trying to restore to it.

Has the U.K. prime minister got the best possible deal from the EU?

This deal that David Cameron agreed with Donald Tusk [the President of the European Council] is clearly a charade. It is bordering on a joke. The question of whether Britain has the right to suspend some benefits to Polish or Romanian workers was never the real issue. Cameron has played a political game—he wanted to rid his party of its Euroskeptic malaise and thought he had found a way by holding a referendum that would settle the debate. The issue of Europe has been a problem for the Conservative Party since the 1990s.

It seems to be backfiring on Cameron thought as the Leave campaign is gaining momentum. Is Brexit now even more likely than Grexit?

It’s clear to me that the British public, just like those of many other countries in Europe and around the world such as Canada and the U.S., have had a gutful of insincere politics. They don't know exactly what Mr. Cameron is talking to Mr. Tusk about but they can smell a rat. They understand that there is organized subterfuge and they don't like it, so they will vote against it. Unfortunately this good instinct doesn't always lead to the best judgment. My great fear is that the fragmentation of this already highly undemocratic EU is not going to bring us more national democracy, or improve our circumstances economically, but that the opposite will happen which will only aid the ultra nationalists and those who invest in division.

What hope do you hold out for popular left-wing movements like Podemos in Spain given Syriza’s experience?

The historical record doesn't give me much solace—1929 was that generation’s 2008. The collapse of the financial sector in 1929 began a process of fragmentation that started at the monetary level and soon led to Europeans being at each other’s throats. Although there was a strong left wing in politics, it was the fascist right wing that ruled the roost. There is nothing to stop Europe repeating this sad history. We are seeing the left flaring up here and there but not managing to hold its ground. The only ones making steady progress are the racists, misanthropes and bigots who want to see borders erected and are playing the blame game using Syrian refugees.

What has the response to Diem25 been so far? Are people fed up of hearing from you after your time in government with Syriza?

This is not a Syriza extension nor is it a Varoufakis project—I am only one of around 40 founders. We have had tremendous interest from people wanting to get involved from all over Europe, from Finland to Portugal and Ireland. It is true that it began after the crushing of the Syriza government in July, because my collaborators were incensed by the way in which a democratically elected government was treated.

How do you actively plan to help the European Union reform?

We have a manifesto, where we lay out our key principles. We want to start the conversation that Europe has denied itself all these years—working out how to deal with common problems in a common way. What kind of migration policy should we have? How do we separate the migrants from the refugees? Anyone is welcome as long as they are not racist and share our belief that fences and borders are signs of weakness that spread insecurity in the name of security.

In the U.K. the opposition leader, Jeremy Corbyn, and his Shadow Chancellor John McDonnell are pushing an anti-austerity, open borders agenda. Do you have any advice for them?

Jeremy and John are facing a very difficult task. They were elected by the rank and file of the Labour Party against the wishes of the majority of its MPs. In addition, the U.K. press is absolutely determined not to give them opportunity to speak directly to the British people, which is a situation I understand. While I was finance minister, not a single Greek TV channel supported anything I said and yet my approval rating climbed from 40 to 70 percent.

My advice to Jeremy and John is to keep plugging away, keep doing the right thing, keep leading. At some point either the media will have to accommodate you or they will move on. I was quoting from the economist Larry Summers, Margaret Thatcher and her former Chancellor Norman Lamont, and I was still being portrayed as a dangerous Communist.

How did your friendship with Normal Lamont come about and do you have much in common aside from you wanting Grexit and him possibly wanting Brexit?

I am very proud of my friendship with Norman, both personally and politically. When the left and the right can meet on a human level and forge a common agenda on important topics, such as Europe, I think that bodes well for the world. When I was a young man living in the U.K. I didn't miss a single demonstration against Mrs. Thatcher’s government, which Norman was part of. He doesn’t regret his position and neither do I. So what do we have in common? The answer is a commitment to parliamentary democracy, to liberalism, to the sovereignty of parliament. Anyone who knows me knows that I don’t want Grexit, and despite Norman veering towards voting in favor of Britain leaving the EU, he never allowed his own prejudices to color his advice to me when I was a minister.

Who holds the balance of power in Europe?

Power is dispersed, that’s the whole point. When you watch an ancient Greek or a Shakespearean tragedy like Macbeth is anyone really in power? They are all dramatic figures who create a catastrophe out of their attempts to maximize their individual power. Watching Mario Draghi [the President of the European Central Bank] , Angela Merkel [the German Chancellor] and her Finance Minister Wolfgang Schäuble up close, what struck me most was their powerlessness. It was as if the game had a life of its own and was leading them towards the destruction of the European enterprise.

How do you feel about the more centrist direction that Alexis Tsipras has taken his government in since you resigned?

I am very careful not to slide down the slippery slope of name-calling between former comrades. Politically speaking, the deal that Tsipras has accepted is not viable. It was designed to fail because Schäuble is determined to see Greece removed from the eurozone. Tsipras has agreed to do the impossible—this economic program can't be implemented even if God and his angels came to Athens to help. If you want to know what is happening in Greece, then look at the last five years which have seen a vicious cycle of austerity, shrinking national incomes and rising levels of unsustainable debt. Syriza was elected in January 2015 to end this cycle, and where Alexis and I disagreed was that eventually he decided to become its manager... At some point the political system will jettison him if continues to try to do the impossible.

What was the most disappointing thing you learned in politics as a minister?

I expected a massive backlash against my views and my politics. But what I never expected was that I would reach an agreement with these people in the Eurogroup, shake hands on it, and then 10 days later it was as if that agreement never happened. This kind of personal moral failure is something I hadn't expected. That is what has fuelled the rise of DiEM25.

Senator Bob Menendez said he was "disappointed, but not surprised, that the Trump administration has failed once again to prioritize our long-term national security interests or stand up for human rights."